How To Validate Your Business Idea This Weekend

In the past 20 years, I've built two businesses from scratch, sold one of them, and coach thousands of entrepreneurs in the process of starting their own. And I've seen the same, the same mistake over and over again. People spending months, sometimes years, building something nobody asked for, something that nobody wants. They spend time on perfecting the product, they build the website, they design the logo, they set up the social media accounts, they launch, and nobody buys. Not because the idea is bad, because they never validated their business idea before they built it. Here's the truth that changed how I build businesses forever. You don't know what the market wants until you put it in front of them, and you don't need months to know if your idea is going to work or not. You actually just need a weekend, a couple of days. In this episode, I'm going to give you the exact five-step validation formula. I use to test my business ideas, projects, whatever I launch, so that I don't waste time, money, and don't have a bunch of headaches. If your idea passes all five of these steps, you have a real business worth building. And if it doesn't, you just saved yourself months and a ton of money in the process. So listen up, pay attention, and thank me later. Let's get into it. Welcome back to the $100 MBA Show. I'm your host Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start grow and scale your business. I got a quick favorite to ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey. Step one, identify the painful problem. Every successful business is built on a painful problem. Not an inconvenience, not something people occasionally think about, but a problem that costs people time, money, peace of mind on a regular basis. This is the type of problem you want to build a business around. The more painful the problem, the easier it is to sell. Let me say that again. The more painful the problem you're trying to solve, the easier it will be to sell the solution because people are starving for this problem to be solved. Here's how to find out if your idea is solving a genuine painful problem. Go to Reddit. I know it sounds simple, but I'm telling you it's a gold mine because people go to Reddit to complain, to ask questions, to vent, and this is a place where you can find out where your audience is suffering. What are the areas that they need to have solved in their life and their business, and then you can come up with solutions and sell them on these things. Not them in particular, but you can come up with a solution to sell people like them to have those problems. Literally, go into the threads, read what your audience is complaining about. So if, for example, you are serving mothers that are working and have young children. So say that's your audience, that's your demographic. Go to the threads that pertain to those people. Look for the questions that come up over and over again. Look for the posts that have hundreds, even thousands of comments because they are deeply frustrated about something that they're complaining about. These recurring complaints are your market signal. If people are venting about the problem that you are solving, this is a good sign. If you don't hear anything about the problem you're trying to solve, that's a sign you should not be solving this problem because it's not a painful problem, not painful enough for people to complain about it publicly. I'm going to give you a couple exercises you could do this week that's going to really allow you to identify if the problem you're solving is a real problem. Number one, one option is like I said, go to Reddit in three communities that relate to your idea, write down five of the most common complaints. If your idea solves one of them, move on to step two, step two, which we're going to cover in a second. Another exercise you could look at if you are not a big fan of Reddit or you get lost in the threads, go to amazon.com. Go to amazon and search the books on the topic that you cover. So say, for example, your specialty is weight loss. Go to all the books that deal with weight loss and filter for the three star reviews. Why? Because five star reviews are going to be glowing and we're going to love the book. Once star reviews often are biased or maybe not really fair, three star reviews, I would say three and two, people will share, hey, this is what I loved about this book, but I wish this book talked about this or I still have this problem or I wish it provided some solutions on this area. These are really great pieces of information that you can figure out. Hey, are people complaining about the things I'm trying to solve? So two options for the exercise, go to Reddit or go to amazon reviews. Let's move on to step two. Find out if people are already paying for a solution. This is huge because if people are already attempting to solve this problem, this means they are proving with their dollar that they're serious about finding a solution. Even if the solution is not completely solving the problem, they're just so desperate. They'll try anything. Here's a quick tip. Go to Etsy, for example, and search for products in your category, sort by best sellers. Look at what is selling and how many sales it has. How many people have bought this product? If you find products with hundreds of thousands of sales, you have just confirmed that people are serious. They are willing to pay money for this product. People are actively spending money to find a solution to a problem. Now, maybe the product is mediocre. Maybe the product doesn't really solve the problem. Maybe you can do a much better job at solving this problem. Great, but it's still proving that people are doing something. They're trying to spend money, the throwing money at the problem, hoping that there is a solution here. Now, in my own case, when I was building my software company with an Arninha, people were so happy to give me money at just hoping that I can solve some of their webinar problems. Because running webinars back in 2014, '15, '16 was a big pain in the butt. Okay? You had to Frankenstein a bunch of software together, marketing software, email marketing software, video streaming software, all together, hopefully make this all work together and nothing breaks in the whole process. So people are willing to pay me up front for the promise of a solution. We pre-sold Webinar Ninja to our first 250-bit of members. People gave me money without any software at hand. They were promised it in four months. So this was a clear signal for me that, "Hey, I'm really solving a painful problem. People are willing to just give me money on the hope that I can solve the problem." By the way, you don't have to search for products that are exactly like yours. You can find other products that are similar. Say for example, you have a coaching program where you help people in a group coaching format to get their finances in order. Now, you don't sell courses, you sell coaching, but you can go to you to me and find out what courses are selling on you'd meet. Are personal finance courses selling? Are people buying this course? Are people spending good money? Or are they only spending like $50 on a course? Or are they willing to spend $300? So it gives you an indication if there's money in this market. So here's your exercise that you could do so you can see if you can past step two of this process. Find three products or services that are already being sold to address the problem that you are trying to solve. If they exist, if these products exist in the world and they are selling people are making money with these products, you have market validation. You can move on to step three. Now, before I move on to step three, I do want to say one thing. A lot of people say, well, if I find other products being sold, doesn't that mean there's competition? Doesn't it mean there's going to be harder for me to sell? No, it doesn't mean that. It means that you have validated that people are willing to spend money on that. The opposite is actually much harder. If you're trying to create a new product that no one's ever heard of or don't really understand, it's very, very hard for you to survive in the marketplace because you have to convince people of a new concept. A good example of this is Airbnb when they came out. No one had any idea what this thing is. They're like, what? People are going to live in my house and they're just going to let them sleep there and they're going to be right next to me. Well, this is weird. I'm going to sleep in a stranger's house. It's just a weird concept. And in the beginning, Airbnb, their MVP product didn't even have a way to transact, meaning that people had no way to pay for the stay. So people actually paid in cash to the host directly. But the point here I'm trying to make here is that Airbnb, the only way they survived is because they were ventured back. They had enough money to just teach people about the concept of Airbnb. It took nearly a decade before they started to get traction. So you don't have a decade as a bootstrap business as somebody doesn't have hundreds of millions of dollars in funding. So what I'm asking you to do is to go to a validated market and just come up with a better solution to the same problem that people are trying to solve. All right, that's out of the way. Step three, talk to real people. This is a step that most people skip because it's the one that is the most painful. It's the most uncomfortable step. It's the most important one in my opinion. Before you build anything, you need to talk to at least at least 10 people who have the problem you're trying to solve. I'm not talking about your friends. I'm not talking about your family members. I'm not talking about your neighbors. I'm talking about people that actually have the problem that you're trying to solve. They're actively trying to solve this problem. In other words, real potential customers. You need to find them and speak to them, whether you're going to speak them on a Zoom call, in person, on the phone. And you can find these people easily within your own groups, with your own Facebook groups, in your own network, in your own Instagram followers, whatever it might be. If you just post and ask people to reach out to you, if you are serious about building a profitable business, this is a step you don't want to miss. You don't want to skip this because this is what it's all about. This is where the rubber meets the road where you actually talk to real customers, people that actually want what you have. And you got to be proud enough, proud about what you've built, or what you're about to build, to talk about it. So what you want to do here is you want to tell them that you're researching a problem that you would like to solve and you'd love 10 minutes of their time to see if you can help them out in some way that you can learn about the problem that they're going through so that you can solve it better. And I'm going to give you a script, ask these three questions. How big of a problem is this for you on a scale of one to ten? Next question, what have you already tried to solve it? What have you already done to try to solve this problem or have you just ignored it and not done anything? And number three, what would be the ideal solution for you? What would it look like for you? And you can tell them you can imagine any kind of solution, like literally like say for example, they're like, I want to learn how to play the piano. Well, if I could just download the script or download the skill into your brain, would that be the best solution? Yeah, that'd be amazing. It'd be like the matrix, okay? That's fine. That's a good answer. Why? Because it means they care about how fast they learn it. They want to pick it up as fast as possible. So if you can do it better than the competition, if you can get them to learn how to play the piano faster, they're going to play your premium for that. In these 10 minutes, you want to ask those three questions with the purpose that you want to hear as much information from them as possible. So you want to listen more than you talk. So if you're going to go beyond the three questions, they're just follow up questions so that you can hear more from them. You're not pitching here. You're not selling. You're learning. You're finding out what you need to solve, what you need to do to have a complete solution so that you can actually come up with something innovative, something that's different from what the competition's doing. And what you learn from 10 honest conversations is worth more than any kind of market research. And there's so much you're going to learn from this. We did this countless times in our history in all the businesses that we've run. But the one that cups a mind is we used to do this all the time at Webinar Ninja where we would think of a new feature that we want to put into Webinar Ninja. We're not really sure if this is going to solve the problem, but we want to learn from our customers. So we'd reach out to our customers and say, hey, would you like to jump out a call and we'd give them maybe some credit so that they can be able to get a free month of our software as compensation. And what we would do is we sit there and we would record the call and ask them, hey, can we record this call? And we would ask them some of these questions and find out what they're suffering from. What are some of the workflows that they're going through so that we can maybe solve some other problems in the workflow so that our software becomes more and more valuable to them. Now, the whole point of this market research is not only to solve the problem that we're trying to solve or to present a solution that would make sense to them and make them say, hey, yeah, I want that. That's a solution that looks attractive. But we also want to understand their world, understand what they're dealing with. We want to understand the language they use to describe this problem. And this is why we record this so that we can pull a transcription out. And this is super easy now with AI. We didn't have AI back in the day. But we just pulled a transcription out and we can use the same language when we are marketing to new customers. We can use the same language on our sales pages on our website so that we can describe the problem that they are describing on these calls in the same way so that when people hit our website and they'll be like, hey, this person really understands this problem. They must understand how to come up with a good solution. They must have a solution that's right for me. This is gold. Just this piece of having this conversation and having the language that they use will help your business grow in ways you can't imagine. So as you're having this conversation, ask yourself, do they describe this problem with a bunch of emotion? Are they getting fired up about this? Do they have a history of trying to pay for the solution and just been hitting brick walls and not really having a full solution or maybe solving one part of the problem, not the full problem? You know, do they light up when you describe what you're thinking about building the solution that you have? Are they like, hey, hey, tell me more? And they ask you questions. If somebody's asking you questions about something you just said, it means they're interested. If you're getting all the right signals, then you know you found something that is really resonating. Now, you can do this this week. You could do this on the weekend where you can reach out to 10 people in your target market, whether they're people in your network and your social network, people on your phone literally take out your phone and look at your contacts and see, who do I know that maybe have this problem, that it may be complained about this before that maybe I worked with in the past and can give me some answers on, you know, some of the things that I'm looking for. Some of the answers to the questions that I mentioned earlier write down exactly what they say in their own words or ask them if you can record the call, get on a Zoom call or any kind of video call and see if you can transcribe it. Those words become your marketing copy later. You're going to love it. It's going to be one of the best things you ever do. Even if you don't actually find the solution, you'll understand how to describe the problem better in your marketing just by transcribing that call. Hey, if this episode is giving you a framework, you can actually use that you can implement this weekend. I want you to subscribe to the show because I don't want you to miss the next episode that's coming up. Well, it's actually coming in a few episodes and this episode is only that we're working on right now. It's called how to create a vision for your business without feeling cliche without being cliche. I'm going to give you a step-by-step plan because this word vision gets tossed around all the time. What's your vision? What's your mission? What does that exactly mean? A lot of us, we start businesses, we get to work, we try to make a buck and we forget about this whole thing of maybe I need a vision, maybe something that's going to guide me and guide my team to where we're going, where we're heading for the future. So if you want to cut through all the mumbo jumbo and understand how to build a business vision without feeling all corny, then you want to tune in. Make sure you subscribe so you don't miss that episode. So you get that episode automatically in your feed. Step four, make the offer before you build the product. I mentioned earlier that we pre-sold webinar in India that we actually sold the product before we actually had it ready. And I did this on purpose because before I started my software company, Webinar in India, I sold an information product called the DIY webinar guide showing people how to run webinars, how to put the software all together. And I worked really hard on that product. I spent four months in a colonized shop videos and created guides and we created templates and then we launched to crickets. Okay. You know how many sales we got on that product to okay, two sales and that's not the worst of it. One of a was a chargeback. Okay. One of them was actually fraud. Somebody stole some discredit card and was just they're just testing out the card to see if it worked. The other sale was from a friend from a fellow entrepreneur, John Lee Dumas, shot out to entrepreneurs on fire who bought it just to see what I was working on. That failure taught me that I should not be investing four months of my life just to find out later that hey, nobody wants to learn how to pull off the webinars that I was pulling off. No one wants to put all the software together. They want a tool. They want a solution. They want something that's going to do it for them. And that's how we came up with Webinar Nijan. So when I launched Webinar Nijan, I decided to do the opposite. I learned my lesson. I got burnt and I was like, okay, I'm not going to do what I did last time. This time I'm going to do the opposite. Instead of working on on it for four months, I'm going to sell it first then deliver it four months later. And that's exactly what we did. We launched it within 48 hours, 150 beta spots got sold. Then we opened up another hundred spots that got sold out in 24 hours. And that was proof that hey, people want what I have people are willing to put money down on something that doesn't even exist yet. It's just an idea. So when I say sell it before you build it, I'm not being metaphorical. Okay, I'm being literal. This is exactly what I did. And it's the best thing I did one because evaluated the idea. But two, it allowed to have some money coming into the business to fund a better build of that product. We were able to basically get a seed round from our customers because they paid us money for the product before we actually launched the beta $230 as a deposit. And then from there, you know, you could do the math $230 times 250. That gave us enough change for us to hire a good developer to clean up the design, to be able to market the product and put out a product that actually has a better chance of success because we had some dollars behind it. So what I'm advising you to do is to try to sell your product before you actually create it. So we had a landing page that showed what the product would look like. We had some mock-ups. We showed them what the solution would be. We told them like, this is what it's going to do. This is how it's going to save them time. We show them the value. Let me bring this into real life. Save, for example, you want to start selling some really cool graphic t-shirts. You are a great designer and people love the things that you create. Let's say, for example, you are wearing one of these t-shirts to a party with all your friends. And one of your friends to say, "Hey, I love your t-shirt." Like, where'd you get it? And then you say to them, "Hey, I actually make these t-shirts. Would you like to buy one?" And they say to you, "Yeah, I'd like to buy one." In that moment, you need a transaction. In that moment, you need to say, "Great, it's $30. Can you send me $30 via Venmo or transfer the money or give me the $30 in cash?" If they say yes, and they give you the money right now, you know that you have a validated idea. You know that people are actually interested in what you have. If they say to you, "Hey, oh, you know, maybe later or let me think about it, then you know that that was all fake and they're just being polite, okay? You need to validate to see if people are willing to give you money for what you have. If they're willing to part with their hard earned dollar, this is where the rubber meets the road. And if you are feeling embarrassed, if you feel scared in that moment to say, "Hey, would you like to pay for this t-shirt? I can make you this t-shirt for $30 in this example." Then I'm going to just tell you straight up, business is going to be very hard for you. If you can't ask for the sale, if you can't be proud enough for what you built, for what you created, then it's going to be very hard for you to be able to make it day through day in business because business is sales, okay? You can't just create something and hope and pray that somebody buys it. You have to go through a process where you actually offer it to somebody and say, "Hey, would you like to buy this thing? This is not much a cost and this is what it's going to do for you. That's business. So just get your feet wet. I'm not discouraging anyway. I want you to just have the courage to say, "Hey, I could do this. I can make this happen. All I got to do is just make an offer." They're the one asking about the t-shirt and you're not forcing it down their throat. So if they're asking about the t-shirt, make the offer in this example, or just call my t-shirts, because anything could be your recipes, it could be your coaching program, it could be a new software product you created. whatever might be. But the point here is that you have to ask for the sale to see if people are willing to pay for it. I'm telling you from experience one real payment from one customer tells you a whole lot more than thousands of people are giving you thumbs-ups and likes and nice comments on social media. Money talks. So when people are willing to pay you for what you have and not just praise you, that means you have a validated idea. So this is your exercise. Create the simplest version of your product right now. Create some sort of offer, meaning like one sentence, one price, one deliverable, what they're going to get for what they're paying. Present it to five people. If you get some sort of response to three people, whatever might be even one person, you know that there's something there. You know that, hey, if I contact five people, I will get one sale. You have an equation that you can follow. See who pays. Find out why they paid. People that didn't pay. Find out why they didn't pay. Understand what their needs are. Why? Because you're going to understand one either you can improve your product or two. Understand that they're not right for your product. You're going to understand, hey, this is not for them. I shouldn't go after these types of people. I should go after the people that actually bought. So that's really the exercise that you should be following. And this is one of the hardest parts of business is actually putting yourself out there. But once you do, it's going to feel easier and easier as you go on. Step five is to deliver and to measure. You have a paying customer. Now you got to deliver. You don't have the perfect version of your product yet because this is just the beginning. You have the minimal viable version of your product that generally solves the problem, right? It solves the problem. Maybe it's not solving to the level that you want, but you have time, right? You're going to be in this business for a while. You're going to have time to perfect it and improve it. But in this step, you want to measure two things. Did it actually solve the problem? When I deliver my solution, when I deliver the product to the customer, did it actually solve the problem that it was intending to solve? And then the second question is, would they pay again or for someone else for this solution? So whatever your product is, would they buy it again? Would they continue the next month, the next year? Would they refuse somebody else? Would they say, hey, you should go to this restaurant. It was delicious. The service is amazing. That's what you really want to find out because a business that only gets one customer one time and doesn't refer anybody else is a very hard business to run. Meaning it's very hard for you to continue to get business and to get customers. So if the answer to both of those questions, again, did the product solve the problem? And number two, would they pay again or for somebody else to you to solve this problem? Because there's a lot of products out there and there are a lot of ideas that sound good and even gets you one sale. But is it a good enough product to get continuous sales to get referrals? That's the kind of product you want. If you don't get that, it doesn't mean it's over for you. It doesn't mean you have to scrap the whole idea. It just means you need to refine your product. You need to refine your offer. You got to figure out how you can get it to the point where people are coming back and buying more or referring other people as well. That's the real test. If you have to hustle and beg for every single sale, you're going to have a very, very hard experience when it comes to this business. It's going to be very difficult for you. What you want to do is you want to allow your customers to be very evangelist, to be the people that actually are your best salespeople that are like, hey, I love this product. I'm telling everybody about it. At the same time, I'm continuing to buy from you. This is going to allow you to not have to work super hard to get new customers because your customers are going to get you customers in addition to the customers that you get. It's a compounding effect. For example, if every customer that comes in continues to buy from you over and over, but also refers to other people to you, that means every customer is worth three customers. So you're compounding the effect of every time you get a new customer. That's the type of business you want to run. So the exercise for step five is to deliver your first paying customer with everything that you have. You want to make sure that you pull out all the stops, right? Make sure that you solve their problem and make sure that they're a happy customer. Then ask them one question. Who else? Who else you know who has this problem that I should talk to? And the wording matters. Ask who else? Not do you know anybody else because who else makes them think about who? Okay. Make them think about who do I know that also has this problem that I can actually help by referring them to you. So if they're able to refer somebody, if they're eager to do this in that moment, that means that you have something there. If they're just kind of having a hard time or they're not even thinking about it or they're like, let me get back to you, you have to follow up with them. And if they can't give you an answer, they can't refer anybody, then you need to find out why ask them, hey, why having the hard time with this is it just your busy? Is it something that the offers kind of difficult to communicate? Is it something that I can do to help out? Is there something I can give you that you can give to somebody else? Like the wording or maybe a sales page to describe the problem a little bit or describe the solution? Find out why this is difficult for them because if it's difficult for them to tell other people or for other people, they're not going to do it. You want to make it as easy as possible as frictionless as possible. So there you have it. A complete five step formality and business idea. Find the painful problem. Confirm people already paying for the solutions. Talk to 10 potential customers, make an offer before you build the product, then deliver and measure. Make sure that you actually are solving the problem. As you can see, this is not about getting lucky. This is not about having the perfect idea. It's about having a good enough idea and then perfecting it over time, refining it, understanding that your customers are your best source of information so that you can improve your product, improve your offer and build a better business. The entrepreneurs who build successful businesses are not the ones with the best ideas. I'm telling you this right now. I know hundreds of entrepreneurs that are highly successful that don't have the best ideas. They just have mediocre ideas that are executed very well. They're the ones that validate fast. They learn from real customers. They build based on demand that already exists in the marketplace and they just execute. So don't wait for the perfect moment. Use this weekend to start validating your business idea. Run through the steps and find out if you have something that people really need. If this episode has given you the formula you've been looking for to find out, hey, is this idea a thing? Something that I can run with? Awesome. Subscribe to the show. And if you want to continue learning, we have a recent episode that we recently published called if you have less than $10,000 saved, I recommend you do this with this money with any kind of savings you have. What do you invest in? How do you invest in yourself? How do you compound that money so that you can have a little bit more of a buffer instead of $10,000? You have $100,000 so that you can start growing not only your skills but growing your potential of making more money. Because once you have validated an idea, the next question is how do you get it off the ground without a big budget? And that episode is going to give you the exact steps and the exact model will follow. If you found today's episode helpful and you want more practical business lessons to help you start grow and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app though one that you're using right now, whether it's Apple or Spotify or whatever you listen to podcasts by hitting subscribe you get our next episode automatically. And it's the best way to support the show. It's absolutely free and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.